Moran v. Johns-Manville Sales Corp., JOHNS-MANVILLE

• Decision Date: 26 October 1982
• Docket Number: No. 81-3373,JOHNS-MANVILLE,81-3373
• Citation: 691 F.2d 811
• Parties: Dolores M. MORAN, Executrix of the Estate of Edward P. Moran, Deceased, Plaintiff-Appellee, v.SALES CORP., Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 811

691 F.2d 811

Dolores M. MORAN, Executrix of the Estate of Edward P Moran, Deceased, Plaintiff-Appellee, v. JOHNS-MANVILLE SALES CORP., Defendant-Appellant.

No. 81-3373.

United States Court of Appeals Sixth Circuit.

Argued May 24, 1982.

Decided Oct. 26, 1982.

Thomas P. Mulligan, Michael A. Nims, Jones, Day, Reavis & Pogue, Cleveland, Ohio, Lively M. Wilson, Stites, McElwain & Fowler, Louisville, Ky., for defendant-appellant.

Robert E. Sweeney, Thomas Terry, Sweeney, Mahon & Vlad, Cleveland, Ohio, for plaintiff-appellee.

Before MARTIN, Circuit Judge, and PECK and BROWN, Senior Circuit Judges.

JOHN W. PECK, Senior Circuit Judge.

In this diversity action, Johns-Manville Sales Corp. ("JM") appeals from a judgment for the plaintiff, and from the trial court's denial of JM's motions for judgment notwithstanding the verdict ("JNOV"), for a new trial, and for a remittitur. On appeal, JM attacks the sufficiency of the evidence at trial to support the jury's award of $350,000 in compensatory and $500,000 in punitive damages. JM also offers policy arguments against any award of punitive damages in this case.

Edward Moran, the plaintiff's deceased, worked for over thirty years installing insulation. During that time he worked with asbestos insulation products made by JM's corporate predecessors. Moran died of lung cancer at age sixty-one. His executrix prosecuted this action against various manufacturers of asbestos products under a theory of strict liability in tort.

I. SUFFICIENCY OF THE EVIDENCE

Strictly speaking, this Court does not review the actions of juries. Our review of the sufficiency of the evidence is by review of a trial judge's rulings on motions for directed verdict or JNOV. In diversity cases within this Circuit, this Court resolves questions of the sufficiency of the evidence by applying the test of sufficiency under state law. E.g., Chumbler v. McClure, 505 F.2d 489, 490 (6th Cir. 1974); Moskowitz v. Peariso, 458 F.2d 240, 244 (6th Cir. 1972). Under the test in Ohio, the forum state, an issue is in the province of the jury "when there is sufficient evidence relating to that issue to permit reasonable minds to reach different conclusions on that issue...." E.g., O'Day v. Webb, 29 Ohio St.2d 215, 215, 280 N.E.2d 896 (1972). ¹ The test is not whether the trial judge would grant a new trial on the weight of the evidence. E.g., Hamden Lodge v. Ohio Fuel Gas Co., 127 Ohio St. 469, 469, 189 N.E. 246 (1934).

A. Motions for Directed Verdict and JNOV

JM first argues that there was insufficient evidence that it knew or should have known of health hazards to insulation workers like Mr. Moran. JM's knowledge (or duty to discover) is relevant under the following rules governing strict product liability under Ohio law:

"1. One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

"(a) the seller is engaged in the business of selling such a product, and

"(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

"2. The rule stated above applies although the seller has exercised all possible care in the preparation and sale of his product, and the user or consumer has not bought the product from or entered into any contractual relation with the seller." Temple v. Wean United, Inc., 50 Ohio St.2d 317, 317, 364 N.E.2d 267 (1977) (drawing from Restatement (Second) Torts, § 402A).

These rules are modified in the case of unavoidably unsafe products: the Supreme Court of Ohio has refused to hold the manufacturer of a prescription drug strictly liable to a consumer when the manufacturer has provided to the medical profession adequate warnings of the dangers of the drug. See Seley v. G. D. Searle & Co., 67 Ohio St.2d 192, 192, 423 N.E.2d 831 (1981). "A warning is adequate where, under all the circumstances, it reasonably discloses all risks inherent in the use of the drug of which the manufacturer, being held to the standards of an expert in the field, knew or should have known to exist." Id. syllabus 2. This adequacy is a question of fact. Id.

The parties both look to Seley for the legal principles relevant to liability in this case. Thus, they apparently agree that asbestos insulation material is an "unavoidably unsafe product," and that Ohio law would not impose strict product liability on its manufacturers unless they failed to provide the warnings required by Seley.

JM contends that there is insufficient evidence that it knew or should have known of the health hazards to installers of asbestos insulation before 1964, when it first began to put warning labels on that product. JM argues that the "state of the art," that is, the state of knowledge of experts in the field, was not shown by Moran to include knowledge of the health risks to workers such as himself. JM's conclusion is that Moran thus failed to show that its insulation products were "defective," even without warning labels.

We find Moran's evidence of known or knowable risks to insulation workers to be ample. By deposition testimony, the late Dr. Kenneth Smith, a former medical director at JM, testified that he was aware of the "association" between lung cancer and inhalation of asbestos fibers in the late 1940's; he further testified that he was aware of the cancer "hazard" from the inhalation of fibers by the late 1950's. Smith stated that he had recommended placing labels on asbestos-containing products as early as 1952 or 1953. In his opinion, the decision by JM not to use such labels then was purely a "business decision." Another chief witness for Moran was Dr. Joseph Wagoner, an epidemiologist. Dr. Wagoner surveyed the medical literature relating to the hazards of asbestos and concluded that by 1953 there was "well advanced information" showing a "cancer problem" in the use of asbestos-containing insulation.

Cross-examination of these witnesses tended to show that causal connections between lung cancer and use of asbestos products were not established with any certainty before JM began using warning labels. Yet, as Justice Sweeney noted in his opinion in Seley:

A jury may find that a warning is inadequate and unreasonable even where the existence of a "risk," i.e., a causal relationship between use of the product and resulting injury, has not been definitely established. Thus, where scientific or medical evidence exists tending to show that a certain danger is associated with the use of the drug, the manufacturer may not ignore or discount that information in drafting its warning solely because it finds it to be unconvincing. 67 Ohio St.2d at 198, 423 N.E.2d 831 (citations omitted).

If a jury may find a warning inadequate in such circumstances, then, a fortiori, it may find the absence of a warning unreasonable. Judge Wisdom has put it very well: a duty to warn attaches, not when scientific certainty is established, but "whenever a reasonable man would want to be informed of the risk in order to decide whether to expose himself to it." Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076, 1089 (5th Cir. 1973), cert. denied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107 (1974).

JM relies particularly on the "Fleischer-Drinker" ² study, published in 1946, to rebut Moran's assertion that the state of the art embraced knowledge of health hazards to insulation workers before JM began putting warning labels on asbestos insulation. This study, conducted at U. S. Navy and government contract shipyards by three Navy officers and one member of the U. S. Maritime Commission, concluded that naval "pipe covering is not a dangerous occupation." Fleischer-Drinker at 16. Comparatively few of the workers studied by Fleischer and Drinker, however, had had long-term exposures to asbestos dust-a point made by Dr. Wagoner in his direct testimony for the plaintiff. Moreover, the authors of the study noted that if pipe coverers worked steadily at jobs producing high concentrations of asbestos dust-such as band sawing-a "considerably greater" incidence of asbestosis could be expected. Fleischer-Drinker at 16. In short, the Fleischer-Drinker study need not have been considered by the jury to epitomize the state of the art, nor to excuse JM's failure to place earlier warnings on its insulation products.

JM next argues that the evidence at trial did not support an award of punitive damages. JM states that Ohio law requires that "actual malice"-which JM apparently equates with ill-will-be established before punitive damages may be awarded. This is not the law of Ohio as stated by the Ohio Supreme Court or as construed by this Court. The Ohio Supreme Court recently summarized the "malice" justifying punitive damages thus:

Evidence of actual malice ... must be present before a jury question of punitive damages is raised; actual malice may take either the form of the defendant's express ill will, hatred or spirit of revenge, or the form of reckless, willful or wanton behavior which can be inferred from surrounding circumstances. Detling v. Chockley, 70 Ohio St.2d 134, 137-38 (436 N.E.2d 208) (1982) (per curiam). Accord, Drayton v. Jiffee Chem. Corp., 591 F.2d 352, 365-66 (6th Cir. 1978); Gillham v. Admiral Corp., 523 F.2d 102, 108 (6th Cir. 1975) (applying Ohio law).

In the product liability action of Leichtamer v. American Motors Corp., 67 Ohio St.2d 456, 456 at syllabus 2, 424 N.E.2d 568 (1981), the Ohio Supreme Court held that "(p)unitive damages may be awarded where a manufacturer's testing and examination procedures are so inadequate as to manifest a flagrant indifference to the probability that the product might expose consumers to unreasonable risks of harm." By analogy to Leichtamer we hold that a jury question of punitive damages was established if a reasonable juror could have concluded that JM's failure to...